While projected cattle prices are considered to be the primary determinant of the financial viability of the representative ranches, the prices of feed crops and bi-products can also have an impact. The ranches produce hay and are often net buyers or net sellers. At least two of the ranches retain ownership through the backgrounding stage and feed some concentrates. The smaller Missouri ranch produces a number of grain and oilseed crops, and the smaller Texas ranch also raises broilers. Additionally, crop prices have an impact on fed cattle returns, which impacts feeder cattle prices. Projected livestock prices for FAPRI’s August 2007 Baseline are presented in Table 1. In general, beef cattle prices are projected to decline each year from 2008 though 2012, but feeder cattle prices are now expected to stay above $102/cwt. Specifically, prices for classes of cattle are projected to move as follows: • Feeder cattle prices are projected to peak at $118.46/cwt in 2008 and decline to $102.03/cwt by 2012. • Fat cattle prices peak at $94.21/cwt in 2008 and end at $86.40/cwt in 2012. • Cull cow prices range between $47.14/cwt and $52.98/cwt during the 2007-2012 period. Projected crop prices for FAPRI’s August 2007 Baseline are also summarized in Table 1. Individual crop prices are projected to move as follows: • The U.S. all hay prices are expected to hit a high of $123.20/ton in 2007 and then level off to $111.52/ton by 2012. • Corn prices start at $3.10/bu in 2007, peak at $3.38/bu in 2008, and end at $3.25/bu in 2012. • Wheat prices range between $5.11/bu and $4.19/bu between 2007 and 2012, with the highest price expectation in 2007. • Sorghum prices remain in the relatively tight range of $2.92/bu to $3.19/bu through 2012. • Soybean meal is expected to stay between $192.68/ton and $207.88/ton from 2007- 2012. Projected annual rates of change for variable cash expenses are summarized in Table 2. The rate of change in input prices comes from FAPRI’s August 2007 Baseline. Based on projections from Global Insight, annual interest rates paid for intermediate-term and long-term loans and interest rates earned on savings are also reported in Table 2. Assumed annual rates of change in land values over the 2007-2012 period are provided by the FAPRI Baseline and are projected to range between 3.51% and 13.68% per year.